Ford's Jim Farley is probably upsetting dealers, it's about time and I'm ok with that

[smurfslayer]

Take a $700 loss to "upgrade" to the latest &@$%%#*!

You don’t need to have the latest / greatest! They actually last a rather good amount of time, perfectly serviceable. My wife is rocking an iPhone 7? 6(?) years old or so, still works fine.

they’re trying to help their dealers by targeting those who buy and resell at a big profit. Those “brokers” are taking big money from the Ford dealers and that’s all Ford is concerned about.

That’s part of it, but since at least the Jen Too market, it’s not just some stealerships flipping the vehicles, it’s stealerships that are just doing things that yes you CAN do, but yeah, people will hate you for it. Sort of like the guy who started marking up Epipens.

There are some who mark up as a block or deterrent. Some have high profile customers that they will sell to for less than +100k for sure and some are using the vehicles as ‘halos’. But we’ve all heard the stories of the ones who are faithless, tacking on 20, 30 or more thousand at the time of order after agreeing on a price previously. Some states actually do have laws against the ‘bait and switch’ or deceptive pricing model. IIRC I think Maryland may have but if they’re up front about it, it’s either pay or move on.

We’ll see if Ford actually follows through on this.

 

[xlover]

This statement from Farley is NOT about stopping consumer ADMs. Whatever Farley feels about ADMs, the only actions Ford really cares about right now today is using wholesalers to flip new vehicles into higher priced markets for a profit. and secondarily they put a stop to customers using their retail order program like for the bronco having the prices changed out from under them at delivery.

Example of broker problem: local dealer near me has 5 raptors on the lot, including a 37 that meets my specs exactly. Has been sitting for 4 weeks already so i thought maybe market softening just a bit and went in aiming for msrp (or kinda near msrp), they wouldnt go below 17k over and told me they got the car through a broker, still counts as new, and paid way more than MSRP for it just to have it on the lot so their hands were tied

I doubt ford likes that the car buying process is one where the average consumer goes in expecting a scumbag to try to take advantage of them. And the performance/specialty vehicles are some of ford biggest fans and most well to do customers but ultimately their hands are tied by anticompetitive anti-capitalist dealer protection laws. The simple truth is if dealers were forced to compete in a true capitalist environment where ford could sell the cars that roll off the assembly line to whomever they choose, at whatever quantity they choose, whether it be service center/dealer, customer, 3rd party retailer (imagine a best buy for cars where you could have a new TRX and raptor parked next to each other) most dealers would fold because they cant actually offer the best value to the end consumer. I am sure Ford and the other OEMs wish this model would go away but until local legislatures make changes we are stuck in a controlled economy for cars.

 

[chrisuhl797]

You don’t need to have the latest / greatest! They actually last a rather good amount of time, perfectly serviceable. My wife is rocking an iPhone 7? 6(?) years old or so, still works fine.


That’s part of it, but since at least the Jen Too market, it’s not just some stealerships flipping the vehicles, it’s stealerships that are just doing things that yes you CAN do, but yeah, people will hate you for it. Sort of like the guy who started marking up Epipens.

There are some who mark up as a block or deterrent. Some have high profile customers that they will sell to for less than +100k for sure and some are using the vehicles as ‘halos’. But we’ve all heard the stories of the ones who are faithless, tacking on 20, 30 or more thousand at the time of order after agreeing on a price previously. Some states actually do have laws against the ‘bait and switch’ or deceptive pricing model. IIRC I think Maryland may have but if they’re up front about it, it’s either pay or move on.

We’ll see if Ford actually follows through on this.

Cell phone still works? My IPhones barely make the year.

 

[chrisuhl797]

This statement from Farley is NOT about stopping consumer ADMs. Whatever Farley feels about ADMs, the only actions Ford really cares about right now today is using wholesalers to flip new vehicles into higher priced markets for a profit. and secondarily they put a stop to customers using their retail order program like for the bronco having the prices changed out from under them at delivery.

Example of broker problem: local dealer near me has 5 raptors on the lot, including a 37 that meets my specs exactly. Has been sitting for 4 weeks already so i thought maybe market softening just a bit and went in aiming for msrp (or kinda near msrp), they wouldnt go below 17k over and told me they got the car through a broker, still counts as new, and paid way more than MSRP for it just to have it on the lot so their hands were tied

I doubt ford likes that the car buying process is one where the average consumer goes in expecting a scumbag to try to take advantage of them. And the performance/specialty vehicles are some of ford biggest fans and most well to do customers but ultimately their hands are tied by anticompetitive anti-capitalist dealer protection laws. The simple truth is if dealers were forced to compete in a true capitalist environment where ford could sell the cars that roll off the assembly line to whomever they choose, at whatever quantity they choose, whether it be service center/dealer, customer, 3rd party retailer (imagine a best buy for cars where you could have a new TRX and raptor parked next to each other) most dealers would fold because they cant actually offer the best value to the end consumer. I am sure Ford and the other OEMs wish this model would go away but until local legislatures make changes we are stuck in a controlled economy for cars.

Customers buying cars today at Msrp are buying to flip to resellers. FMV of the car right now is way above MSRP. It’s similar to buying real estate. The window sticker means nothing. Just like pre pandemic it meant nothing as vehicles were selling $5,000 below MSRP. I hope everyone realizes ford is going to raise most MSRP by $10,000 on 2023.

 

[Parappa The Rapta]

I think some tend to use the word capitalism incorrectly. There is nothing uncapitalistic about a manufacturer of a product setting a price for their product. Can you imagine if every time you went and bought a can of soup the price was different? They CAN sell it for a higher price or they CAN sell it for a lower price, that's capitalism.

 

[GordoJay]

I think some tend to use the word capitalism incorrectly. There is nothing uncapitalistic about a manufacturer of a product setting a price for their product. Can you imagine if every time you went and bought a can of soup the price was different? They CAN sell it for a higher price or they CAN sell it for a lower price, that's capitalism.

True. The car market is a weird hybrid and in many ways is more socialist than capitalist.

 

[GordoJay]

A real shop would **** Ford in labor costs, so they pay their dealers (and techs) a set amount of hours for every repair. That allows them to stay on top of their costs.

At a substantial cost to the end user. When pay is set at an artificially low level, it keeps cost down in several ways. There's the obvious. Then there's the time factor, where unprofitable repairs are put off as long as possible by the dealer. That delays the booking of the expense by FMC. Win/win. The cost of downtime is imposed on the consumer. When a repair takes weeks or months, the cost of not having a working vehicle is borne by the consumer. The bean counters at FMC like having the dealers dragging their feet on warranty repair. It saves them money on paper and hitting the quarterly numbers is more important than loyal customers. If you pointed a gun at me and made me invest $100k in an automaker, I'd buy Tesla at it's insane multiple before I'd touch FMC. Sorry if that offends you, but at least Musk looks more than three months out.

 

[melvimbe]

I think some tend to use the word capitalism incorrectly. There is nothing uncapitalistic about a manufacturer of a product setting a price for their product. Can you imagine if every time you went and bought a can of soup the price was different? They CAN sell it for a higher price or they CAN sell it for a lower price, that's capitalism.

The difference between the can of soup and a car is that under normal circumstances, the supply and demand for a can of soup is a relative constant while these factors are constantly changing for cars. While it may be true that the grocery store maintains a set price for the can of soup, you'll quickly develop a secondary market when supply/demand changes but price doesn't. Say a big storm is coming and people stock up on soup...you'll find people selling soup on the corner above the price in the store. Likewise if supply of soup dropped. This is why MS and Sony may have an MSRP for their latest game counsels, but you find they are mostly available at higher prices on secondary markets.

Specific vehicles tend not to have a set demand, as people will be demand models and few will want the older models, through constant supply. So you tend to see ADM deals for new models and below MSRP for older models. Of course supply is low now, so prices are high despite demand levels.

Anyway, point is, there really isn't much difference between a can of soup and car. Both follow the same law of supply and demand.

 

[melvimbe]

At a substantial cost to the end user. When pay is set at an artificially low level, it keeps cost down in several ways. There's the obvious.

That is somewhat balanced out with dealer services dealing with a higher number of the same/similar repairs on vehicles, reducing the cost and time of repair...which is win for everyone.

 

[GordoJay]

That is somewhat balanced out with dealer services dealing with a higher number of the same/similar repairs on vehicles, reducing the cost and time of repair...which is win for everyone.

Somewhat. My local dealer seems to be focusing on selling unnecessary service to people who trust them. Look! Your transmission fluid smells bad! We need to flush your tranny!